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Figuring out whether to move to the suburbs or stay put is a perennial conversation for many New York City families that usually focuses on commute times and housing costs. Now, because the pandemic has changed so much about living in NYC, there's a new impetus to search for houses with more room for working from home, doing online school, and enjoying private outdoor space.
While there may be new reasons to head to the suburbs, weighing the economics of a move to the burbs vs. life in NYC remains a prime consideration.
Jennifer Ross, an agent with Compass and the founder of FromCityTo, which provides community information about suburbs in the tri-state area to buyers from the city, says she's been "inundated" with questions from people who want to make the move from NYC. She doesn't see that interest waning anytime soon.
[Editor's note: This article was originally published in July 2020. We are presenting it again here as part of our summer Best of Brick week.]
If you are calculating the cost of living in the city versus the suburbs, Ross warns it's "very personal and not one-size-fits-all." However there are some basic cost considerations. A good starting point is to speak to a certified financial planner and run a cost analysis.
Here are some estimates to help you get a sense of the cost of moving to burbs vs. staying in NYC.
In the suburbs, you can increase your square footage while getting more bang for your buck. That's what appeals to Jehan Zubler, who lives in a two-bedroom apartment in Brooklyn and works in HR for an asset management firm in Manhattan. She has a three year old and a baby on the way and has been wondering if buying in Montclair, NJ, might work out better for her from a cost perspective, rather than chasing a seemingly elusive dream of buying a three-bedroom, two-bath apartment in Brooklyn that works for her budget.
When it comes to square footage, Shawn Elliott, a broker with Nest Seekers International, says the suburbs win out every time. "You can get double the square footage in the suburbs for half the price of the city," he says, putting the savings at somewhere between 25-50 percent if you buy in the suburbs versus the city.
"On Long Island you could easily find something that goes for under $600 per square foot," he says—adding that the suburban houses he's selling are typically on multiple acres and have tennis courts, pools, wine cellars, and garages. By comparison, the average price per square foot in Manhattan is currently $1,642, according to data from The Elliman Report
Maintenance and upkeep
Of course, all that outdoor space—even if it doesn't include a tennis court or a pool—is going to require upkeep. Lawn maintenance, home repairs, snow removal—all these need to be budgeted for. "Anytime you buy a house there are potential repairs and yard work," Ross says.
That's what Paul Smith (a pseudonym) found out. Three years ago, he and his wife moved from the Upper West Side to Westport, CT, in search of space and good schools for their two kids. They sold their three-bedroom, two-bath apartment and bought a five-bedroom, four-bath house on one acre with a pool. The property is a 10-minute drive from the beach.
Smith estimates pool maintenance costs around $3,000 per year and says he spends about $10,000 a year on landscaping, which includes lawn mowing, snow shoveling, and fall and spring clean ups. He knows neighbors who spend up to $50,000 a year on their yards.
Then there's the additional utilities and costs of owning a house with a larger square footage. Heating and cooling costs amount to $600 a month for Smith.
Simon Brady, a certified financial planner and founder of Anglia Advisors, made the move from Brooklyn to Long Island in the mid-'90s and says he was totally unprepared for the high cost of just existing in the suburbs. Gutter and roof repairs will have you taking a lot more notice of the hurricane reports or incoming storms, he says.
And even if you like to do your own gardening, "peer pressure or dirty looks from the neighbors will eventually force you to pay a landscaper" for more professional results Brady says.
You also need to consider the additional couches, chairs, tables, beds, lamps, shelves, bathroom fixtures, and backyard furniture, and grill you'll need. "That's thousands of dollars right there," Brady says.
Or more like tens of thousands of dollars: Smith says he spent $28,000 on furniture at Restoration Hardware when he moved from his 1,200-square-foot apartment to his 4,000-square-foot house.
Walkability and whether you need a car (or two)
According to AAA, the average annual cost of car ownership is $9,282, or $773 a month. If you plan on making the leap from a no-car family to a two-car family, you're looking at close to an additional $20,000 a year. If you already own a car, you may find insurance is cheaper in the suburbs. Smith says his premiums halved when he moved to Connecticut.
There are some suburbs that are more walkable than others and that makes a difference for the number of cars you plan on parking in your driveway. Ross identifies Larchmont, Pelham, and some of the river towns like Hastings and Dobbs Ferry as more walkable than others. In New Jersey, those types of neighborhoods are Montclair, Maplewood, Summit, and Chatham. In Connecticut, there are neighborhoods in Greenwich and Westport where you can walk to stores, schools or the train station.
Transport and your commute
Even as the city opens up, the coronavirus is keeping plenty of employees at home. However, if you'll need to commute into the city, it's worth considering the cost of the journey and the time it will take. A 80-mile round trip from Westchester into Manhattan will cost $1,000 per month for gas if you choose to drive alone. If you use Metro-North your monthly costs are in the range of $100-$400-plus, depending on where you live.
Ross says a lot of her clients pay for parking garages in the city at a cost of around $500-$600 per month and the move to the suburbs removes that cost. "It's not like you are saving that money when you move to the suburbs but it's spent in other buckets," she says.
Home insurance will vary depending on the risk associated with your suburban home, says Davon Barrett, a certified financial planner with Francis Financial. He points out the annual premium usually falls within the range of $1,200 to $2,000 per year but that can vary. "You can have two identical houses but if one is on the beachfront it's going to cost more because there is more risk with that home," he says.
Barrett has helped a handful of clients in the past months who are weighing a move to the suburbs. "While the city's convenient, you can't put a price on space and fresh air," he says. He points out the same rule of thumb holds true for both the city and the suburbs that you shouldn't exceed 30 percent of your income on the primary interest of your mortgage and the taxes and insurance.
Property and income tax bills
Property taxes are typically higher in the suburbs. In NYC the effective tax rate is less than 1 percent and in the suburbs you can pay twice that or more. Barrett points out it can vary a lot depending on the school district. State and local budget decisions will affect property tax as well as the whether the area has a robust commercial district. You can figure out property tax rates via local government websites. On average, you should expect to pay from $9,000 to $20,000.
Smith paid $30,000 in annual taxes and maintenance in the city and now pays $20,000 a year for property tax alone.
Property taxes might be higher but one silver lining, Ross says, is that if you are living outside NYC you aren’t paying city income taxes. Depending on your income and tax bracket, the savings can be substantial, for example, more than $30,000 if you earn $800,000 a year.
In addition, Ross points out that nursery school and activities for children also tend to be a lot less expensive in the suburbs. "In general it's a wash—you are just spending your dollars in different places," she says.
Demand for properties in the Long Island suburbs has surged in the past few months, according to Elliot. "Suburbs like Long Island are known for having excellent public school systems, whereas in Manhattan, to send your child to [private school] requires another $60,000 per year. Even on Long Island, private schools are at most half the cost of those in the city."
Zubler hasn't solved the long-term problem of finding a three-bedroom, two-bath apartment within her budget in Brooklyn, but says, for her, there's no clear winner from a numbers perspective. "It comes down to how you picture your ideal life—and how and where you spend your money," she says.
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